Case study lvmh strategy and future diversification

Perhaps the most important advantage that LVMH would expect to see is cost savings. One fundamental problem with mergers is that management may neglect the core business while coping with the mergers. It is associated with a number of product lines such as wines, cosmetics, fragrances, fashion, watches, jewellery and retail and with the most prestigious brands in those sectors.

Also given that the market conditions are not great at the moment, when they improve, LVMH would be in a position to reap the rewards. This represents the largest risk to the sales forecast for LVMH and luxury goods companies in general as US and Europe account for majority of the sales.

New entrants The hazard coming from new entrants is low. In order to reduce the risk of underperformance of the luxury industry in times of changing societal tastes, new fads and a downturn in economic spending it must consider an appropriate balance in it diversification strategy.

The strategy of organic growth through star brands is illustrated in appendix 2. Appendix 5 is an example of the proportion of cost and impact on revenues and the stock performance.

In the case of retailers as buyers; the competitive strength is considered medium. LVMH needs to follow a scheme that incorporates sound leading patterns to ease the integrating procedure to guarantee it brings together the assorted companies construction.

Get Full Essay Get access to this section to get all help you need with your essay and educational issues. This is true by having its own retail chains as it is able to control the quality of the product sold, the quality of the customer service and also the aesthetics of the stores.

Major competitors also have these strengths that with time and the right management team are easy to copy. However the supplier has limited choices since the market is controlled by few operators.

LVMH was convinced that the collection of global brands was the stepping-stone for realizing synergies that would add to the bottom line. A turnover in of 2. However not all mergers are successful as literature indicates that failure rates are as high as fifty to seventy percent Stahlp.

Antoni Appendix 3: A few examples are: I was getting adequate response from the writer and got an excellent paper. However many writers have asked if this is truly a necessity. Many of the brand acquisitions and line extensions had come at a high price, and most of these businesses were yet to generate substantial profits.

May be difficult to warrant the premium paid for luxury goods. Threats The sales of any branded accessory are adversely affected by the proliferation of counterfeit goods and accessories.

The industry is attractive in terms of profits for players that are already in the field. As imitation trade increases, the group stands to lose its brand equity.

Leadership and Organisation Development Journal. As imitation trade increases, the group stands to lose its brand equity. I tell you, it was nice using your services. Firstly LVMH could sell its retail sector.

Swystun, noted that failure to focus on behaviour can sink a merger or acquisition. It was found that the key strategic issues that LVMH face centred on diversification and vertical integration. Antoni Appendix 4: The risk for following this strategy is that LVMH will still be making losses.

The outside forces that have been deemed to effect luxury goods industry the most are: Shelf space is a key element for luxury companies. There is no reason why with effective controls, LVMH would not be able to achieve the same quality customer service.LVMH: Diversification Strategy into Luxury Goods Essay on Case Study LVMH, Strategy and future: Diversification.

In order to determine the key strategic issues a number of analysis tools were applied to the case study; they include Porter's 5 forces model, SWOT analysis and PESTEL. LVMH – Strategy and future: Diversification LVMH – Strategy and future: Diversification Executive Summary The aim of this paper is to discuss the key strategic issues that LVMH face and establi This report is based on the analysis of a case study 27 titled: LVMH’s Diversification Strategy into Luxury Goods.

The scope of this. Introduction This report is based on the analysis of a case study 27 titled: LVMH's Diversification Strategy into Luxury Goods.

The scope of this report is limited to the data contained in the case and additional supporting evidence that was sourced/5(1). LVMH – Strategy and future: Diversification Executive Summary The aim of this paper is to discuss the key strategic issues that LVMH face and establish some future recommendations that can be implemented in order for LVMH to remain successful in the luxury industry.

Introduction This report is based on the analysis of a case study 27 titled: LVMH's Diversification Strategy into Luxury Goods.

The scope of this report is limited to the data contained in the case and additional supporting evidence that was sourced/5(1).

LVMH – Strategy and future: Diversification Essay Sample.

This report is based on the analysis of a case study 27 titled: LVMH’s Diversification Strategy into Luxury Goods. The scope of this report is limited to the data contained in the case and additional supporting evidence that was sourced.